MedPAC recommends changes to IME, outpatient drug payment

Hospital News

The Medicare Payment Advisory Commission yesterday recommended that Congress require the Centers for Medicare & Medicaid Services to transition to a Medicare indirect medical education adjustment that considers both inpatient and outpatient care, although commissioners raised concerns the policy would adversely affect teaching hospitals serving poor urban areas and could have other unintended consequences.  

AHA had urged the commission to reconsider the proposal, which would redistribute IME payments to teaching hospitals during a global pandemic, and called for “a more granular assessment of the hospital-level impacts.”

With respect to separately payable drugs in the hospital outpatient prospective payment system, the commission recommended that Congress direct the Health and Human Services Secretary to apply the pass-through drug policy only to drugs and biologics that function as supplies to a service and are clinically superior to their packaged analogs. It also recommended HHS apply the OPPS policy for non-pass-through separately payable drugs only to drugs and biologics that are the reason for a visit and meet a defined cost threshold.

While AHA supports incentivizing drug makers to produce clinically superior drugs for payment on a pass-through basis, it had expressed concern that the proposal lacked the necessary evidentiary and data analysis on the potential harm to 340B hospitals and the ability of their patients to access these drugs.

In other action, commissioners recommended the HHS Secretary “implement a more harmonized portfolio of fewer alternative payment models that are designed to work together to support the strategic objectives of reducing spending and improving quality.” At future meetings, the commission expects to discuss the complexities of integrating and streamlining models. 

The commission will include these recommendations in its June report to Congress.

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